Things to know for prospective investors about Right issue of Civil Laghubitta Bittiya Sanstha; 100% right shares opens from today

Sun, Aug 9, 2020 5:09 AM on Dividend, Bonus & Rights, Financial Analysis, Stock Market,

-ShareSansar

Introduction

Civil Laghubitta Bittiya Sanstha Limited, a subsidiary Company of Civil Bank is a ‘D’ class financial institution incorporated as a public limited company on 1^st Chaitra 2067 (15 March 2011) under the Companies Act of Nepal. The company got the business operating license from Nepal Rastra Bank to conduct micro-finance activities on 7^th Baishak 2069 (19 April 2012). The company started its operation from 21 Ashad 2069 (05 July 2012). The company has its registered Head Office at Chabahil, Kathmandu, Nepal.

The deposit balance of Civil Laghubitta Bittiya Sanstha Limited as of Shrawan 2076 stands at Rs. 27.11 crores and borrowed Rs. 61.48 crores. It has a loan and advances of Rs. 1.03 Arba. Its Current paid-up capital stands at Rs. 11.98 crores.

About the Issue

Civil Laghubitta Bittiya Sanstha Limited is issuing the Right share at 1:1 ratio which is 1,141,140-unit shares. The Right share will be issued on Shrawan 25, 2077 till Bhadra 15, 2077.

Century Capital Bank Limited has been appointed as the issue manager for the issuance.

Reason for the issue

To maintain the required Capital Adequacy Ratio (CAR) as directed by NRB
To meet the targeted capital structure of the company
To allocate enough capital to expand the company’s branches & financial services
To strengthen the company’s capital profile

Particulars	Total Amount
Loan	83,050,000
Branch Expansion & Human Resources Management	31,064,000
Total	114,114,000

Capital Structure
Authorized Capital	400,000,000
Issued Capital	228,228,000
Current Paid-up Capital	114,114,000
Paid-up Capital after (1:1) Right Share	228,228,000

Shareholding Structure
Shareholder	Total Share	Percentage	Total Amount
Promoter Shareholder	1,369,368	60.00%	136,936,800
General Public	912,912	40.00%	91,291,200
Total	2,282,280	100.00%	228,228,000

*The shareholding structure provided above is after the issuance of right share

Board of Directors
Name	Position
Mr.Sachin J. Rayamajhi	Chairman
Mr.Prasiddha Raj Aryal	Director
Mr.Sachin Newa	Director
Mr.Krishna Prasad Adhikari	Director
Mr. Sachin Jung Rayamajhi	Director
Mr.Hem Lal Bhattarai	Director
Mr.Shakti Ballav Shrestha	Director

Management Team
Name	Position
Mr.Binod Acharya	Chief Executive Officer
Mr.Devkar Karki	Head of Business Operation & Credit Department
Mr.Suman Kumar Dahal	Head of Finance, MIS & Loan Recovery Department
Mr.Subashmani Baskoti	Head of Planning, Monitoring & Supervision Department
Mrs. Bhawani Dhital	Head of Human Resource Management & General services department
Mr.Kushal Paudel	Head of Internal Audit & Compliance Department
Mr.Baru Shrestha	Head of Information Technology Department

Financial Highlights

Particulars	Actual				Estimated*
Particulars	2072/2073	2073/2074	2074/2075	2075/2076	2076/2077	2077/2078	2078/2079
Paid-up capital ('000)	1,05,000	1,09,725	1,14,114	1,19,819.70	2,64,345	2,85,493	3,14,042
Reserve & Surplus ('000)	1,865.44	3,104.92	5,706.80	20,979.03	32,246	44,882	67,086
Borrowings ('000)	89,978.87	1,02,718.34	3,44,000	6,14,829.88	10,68,861	13,51,030	17,09,817
Deposit (000)	53,549.00	1,02,718.34	1,66,885.11	2,71,125.74	4,70,713	7,00,097	9,83,930
Loans and Advances (‘000)	1,69,577.91	3,30,785.82	5,75,257.32	10,03,730.20	17,80,900	23,43,332	30,28,651
Net Interest Income (‘000)	29,749.45	52,974.05	82,212.59	1,30,456.39	2,50,763	3,71,333	4,78,856
Net Profit (‘000)	3,653.54	6,213.17	11,264.38	16,047.51	41,678	60,218	79,303
Earnings per share (Rs.)	3.47	5.66	9.87	13.39	15.7	21.09	25.25
Net Worth per share (Rs.)	101.77	102.82	105	117.5	112.17	115.72	121.36
Return on Equity (%)	3.40%	5.50%	9.40%	11.39%	14.05%	18.22%	20.80%
Return on Asset (%)	1.42%	1.46%	1.70%%	1.51%	2.22%	2.44%	2.50%
Cash Reserve Ratio (CRR)	30.22%	39.75%	32.42%	1.94%	4.07%	3.47%	3.21%

*5% bonus included in FY 2075/2076

The company has been able to accumulate Rs. 3.84 crores in Q3, 2076/2077. With the company forecast, the Reserve and surplus have been in an increasing order which has in one way or the other created higher value for the investors. With the increasing reserve and surplus, the company will be able to maintain the uniformity in the dividend distribution in the near future since it is one of the main sources of the amount required for dividend distribution.

Till FY 2076/2077, out of total member, 62% has been a loyal borrower for the company. The company expects to increase its branches in the future which may increase its customer base and contribute to the higher loyal borrower.

The company has been able to earn a Net Profit of Rs. 1.2 crores in the Q3 of FY 2076/2077. Looking at the past profitability performance, the company has been able to increase its Net Profit overtime. With the benchmark, it has set for the bottom line and with the utilization of the fund it has collected for the expansion and allocation of funds and the increased demand for a loan, the company might be able to increase its profitability in the future.

With an increasing shareholders fund, the company has also been utilizing them in a way where they are able to increase the yield on shareholders' funds. The yield till the date has been satisfying for the shareholders. With management being able to allocate the resources, the company might produce a better yield on the shareholder's fund which will increase their value over time.

Conclusion

Microfinance is one of the most pursued sectors by investors in Nepal. With the companies able to tap into the broader market, there seems to be higher growth in the near future. Civil Laghubitta Bittiya Sanstha has also been able to perform well in the market over time. So, with the information provided above, will you be applying for the issue?